25-07-2012 – (Kazor.com) – Today people invest their money in Stock market. Some people get so addicted to the stock market. The stock market has different rules and regulation according to country. China is one of the most growing countries in stock market.
In recent years the hot topic in stock investors is “China Hot Stocks”. China has many different areas compared to America and European Stock markets. The investors must understand if they want to participate in china’s strong Bull Run from 2005 after the bear was beaten off.
Color codes of Price Movement
The China Stock market has quite opposite color codes compared to western stock markets. The instant price is labeled in red color when price movements are positive compared to previous day price. If it goes down compared to the previous day closing price then the color goes green.
Shanghai Stock Exchange
Shanghai Stock Exchange contains 2 boards. One is known as A Shares and other one is B Shares. Both shares trade in different currencies. A-shares traded in Reminbi and B shares are traded in U.S. Dollar. The Chinese are allowed only to hold and trading the U.S. Dollar priced Shanghai B shares due to China currency control policy. So because of these local people are trading in A-market while foreigners are treated in B market. The number of A-share companies listing is 840 while the listing of the B share company is 54. You can see that the B share companies are relatively small in size compared to A-share companies. There are several companies which are listed in both A & B shares.
Shenzhen Stock Exchange
Here also they consider two boards – A& B shares. These both shares traded in different currency. The A shares are traded in Reminbi while the other one is traded in Hong Kong Dollars. Due to foreign currency control policy, the local people trade in A-market while the foreigners are trading in B shares because they are restricted to the Hong Kong Dollar. There are 670 stocks listed in Shenzhen A market and in B market the number of listed stocks is only 55. So you can see that the size of B market is 10% less then A-Market.
What Foreigners Could Buy?
Foreigners can buy only B shares from Shanghai and Shenzhen. They can buy shares from Hong Kong and Taiwan because those markets are open for them. Foreigners can invest indirectly in A stocks listed in Shanghai and Shenzhen exchanges, for this authority is slowly starting up channels.
Buying and Selling
If you buy shares in the A and B markets then you can’t sell it at the same day in Shanghai and Shenzhen. You have to wait for next working day. Here no “Shorting” allowance for the stocks. So this is a very different technique compared to Hong Kong and many other western exchanges. There you can sell your in the next minute when you buy it or shorting the stock.
So in this way china stock market is different compared to other countries stock markets. So the above information can help foreigners a lot.
Loria is researching on China Stock Market. The above information is a part of that research which really helps foreigners who want to invest in China stock exchanges. To know more about this topic, stay connected with Loria.